Risk-averse auction agents

12 years 8 months ago
Risk-averse auction agents
Auctions are an important means for purchasing material in the era of e-commerce. Research on auctions often studies them in isolation. In practice, however, auction agents are part of complete supply-chain management systems and have to make the same decisions as their human counterparts. To address this issue, we generalize results from auction theory in three ways. First, auction theory provides the optimal bidding function for the case where auction agents want to maximize the expected profit. Since companies are often risk-averse, we derive a closed form of the optimal bidding function for auction agents that maximize the expected utility of the profit for concave exponential utility functions. Second, auction theory often assumes that auction agents know the bidder’s valuation of an auctioned item. However, the valuation depends on how the item can be used in the production process. We therefore develop theoretical results that enable us to integrate our auction agents into ...
Yaxin Liu, Richard Goodwin, Sven Koenig
Added 06 Jul 2010
Updated 06 Jul 2010
Type Conference
Year 2003
Where ATAL
Authors Yaxin Liu, Richard Goodwin, Sven Koenig
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